There is now a lot of evidence of parties taking “opportunistic” points in relation to procedure. That is pointing to historic breaches, often months before a hearing/application, and arguing that these breaches mean that the case/defence should be struck out or evidence or documents denied.

Here we look at the Lloyd case in detail. Examine how the judge came to make the observations he did and consider the practical consequences for litigators. The conclusion reached, unfortunately, is that there are no easy answers.

LLOYD: PICKING OVER THE BONES

The case of M A Lloyd –v- PPC International Ltd [2014] EWHC 41(QB)has featured heavily in recent applications. The extreme argument is that, even though the parties have agreed to extend time in the past, they could not in fact do this. Witness statements/expert reports/documents were thus served late and the opposing party should be struck out/debarred from relying on evidence.

Several months ago, if not several weeks ago, anyone running this type of argument would be subject to strong professional strictures. Now such arguments appear to be commonplace. The judgment in Lloyd has sent a shockwave around the litigation world. It has been analysed closely and key parts of the judgment are widely cited.

LLOYD: THE SITUATION THE JUDGE FACED

However it is worthwhile reading the Lloyd case in perspective. In particular the extreme circumstances the court was considering in relation to witness statements.

(1) The full procedural history of the case was described as “labyrinthine”.

(2) There had been a specific order made on the 11th October 2013 that the claimant file a witness statement and a skeleton argument by the 25th October 2013 and that that “in response” the defendant file and serve a witness statement and skeleton argument in reply.

(3) The claimant did not file a witness statement or skeleton in compliance with the order. At the hearing before Turner J it was, initially, stated that a witness statement had been filed. This could not, initially, be found when it “was eventually retrieved it was found to be a very curious document which counsel promptly conceded was not at all what the court had ordered should be filed and served.” The witness statement related to a different order and did not deal with the matters in the order in question.

THE APPLICATION FOR AN EXTENSION OF TIME IN LLOYD

It may be symptomatic of the case that it was the defendant that made an application for extension

of time for the defendant to file a witness statement. This application was made on the 9th

December 2012, after the date for compliance.

THE PROPOSED CONSENT ORDER

In response to the Defendant’s application the claimant’s solicitors produced a “revised timetable”.

They did not attend the hearing where the “revised timetable” was to be considered but did attend

the following morning, having anticipated what the judgment would be.

“…They did not attend the hearing despite the fact that their proposed order was not agreed. They did, however, attend with counsel on the following morning thereby forestalling the handing down of my judgment which had been reserved on the preceding day. Counsel explained to me that the claimant had assumed that the court would make some order that did not stray too adventurously from the path upon which the parties were in broad consensus and that it would have cost too much for the claimant to come to court to argue over the difference. This assumption was unwarranted.

14. Of course, the court has power under CPR 23.11 to re-list an application where it has previously proceeded in the absence of one of the parties but this is a power which is likely to be exercised sparingly in the light of the specific regard which the court must now have for the need, where reasonably practicable, to allot to any given case an appropriate share of the court’s resources. This case provides a working example of the consequences of a party choosing not to attend a hearing and hoping for the best. As a result of the claimant’s decision not to attend on 16 January 2014, the judgment which was to be handed down on the following day had to be re-drafted and handed down on 19 January 2014 to take into account the fresh submissions raised by counsel for the claimant. I had to hear argument over two days rather than one. Thus an amount of court time which is disproportionate to that which would reasonably have been required has already been taken up. A party cannot simply assume that, where outstanding issues have not been conclusively resolved in advance of a hearing, it can absent itself confident in the assumption that if the court were to make an order to which it takes subsequent objection then CPR 23.11 will afford a comfortable fall back position. Absence in these circumstances may very well turn out to be a false economy.”

THE JUDGE’S REVIEW OF THE LAW

The judge reviewed CPR 32.10.

“THE LAW

15. CPR 32.10 provides:

“32.10 Consequence of failure to serve witness statement or summary

If a witness statement or a witness summary for use at trial is not served in respect of an intended witness within the time specified by the court, then the witness may not be called to give oral evidence unless the court gives permission.”

There are a number of points to note:

(1) The judge was concerned with a period of three months since the order to serve witness statements had been made.

(2) The proposed “consent order” had been made a considerable time after the time that the parties should have complied.

This led the judge to observe that:-

“25. The fact that, at the eleventh hour, the claimant’s solicitors have volunteered a proposed consent order extending the time for service of witness statements falls far short of salvaging their position.

26. CPR 3.8(3) provides:

“Where a rule, practice direction or court order-

(a) requires a party to do something within a specified time; and

(b) specifies the consequences of failure to comply,

the time for doing the act in question may not be extended by agreement between the parties

27. CPR 32.10 specifies the consequences of failure to serve a witness statement. It follows that even if the parties had purported to reach a concluded agreement on an extension of time this would not have been effective unless the court were to be persuaded formally to endorse it. This court is under a duty under CPR 1.4 not simply to adjudicate passively upon the applications of the parties or to rubber stamp their reciprocal procedural indulgences but actively to manage cases. To this end, the court has power under CPR 3.3 to make orders of its own initiative.”

The judge concluded that:

“CONCLUSION

28. Under the new regime, courts should be proactive to achieve the overriding objective as recently re-formulated. In this case, the defendant did not make any application to the court specifically in respect of the claimant’s default in complying with the order of Walker J. but asked only for little more than a new timetable and the court’s indulgence in respect of what it perceived to be its own default. This approach was, in my view, unduly timid.”

WHAT THE RULING LEAVES OPEN

In the light of this any prudent litigator must obtain a court order if they want to extend time in the future. The open questions are:

(1) What is the position in relation to cases where there have been agreements of time in the past?

(2) Must the parties seek relief from sanctions? Or is this, in fact, a retrospective application to extend time?

(3) Alternatively is there an estoppel?

ESTOPPEL

The estoppel argument was considered (or more accurately not considered ) in the context of civil procedure in Thomas –v- The Home Office. Here the argument centred on whether a party who had orally agreed an extension of time for service of the claim form was estopped from arguing that there was a need for a written agreement. The

“The argument that an estoppel can arise from an oral agreement

30. In the claimant’s notice of appeal and in Mr Grover’s skeleton argument in support, it was contended that, if the facts of the present case mean that there was no sufficient “written agreement” for an extension of time for service of the claim form into June 2005, then the defendant was nonetheless estopped from denying that there was such an agreement, or, to put it another way, the defendant was estopped from relying on the time limit contained in r. 7.5, on the basis that there had been an oral representation that the claimant need not serve the claim form , upon which the claimant had relied by not serving the claim form until June 2005.

31. Such an argument would face obvious difficulty on the basis that it would effectively render nugatory the express requirement of r. 2.11 that any agreement to extend time be “written”. Furthermore, there would be obvious force in the argument that, by entering into an oral agreement to extend time, it could not clearly be said that, without more, the defendant was unequivocally indicating that it would not insist on the strict legal requirement that any such agreement, in order to be effective, be in writing.

32. In the event, when faced with the reasoning of the House of Lords in Actionstrength Ltd –v- International Glass Engineering IN. GL. EN SpA[2003] UKHL 17 (especially at paragraphs 9, 28, 35 and 52-3), on a not dissimilar estoppel argument in relation to section 4 of the Statute of Frauds 1677, Mr Grover abandoned the point.

33. In these circumstances, while it is only right to say that, as at present advised, it seems to me that Mr Grover was entirely realistic in abandoning the argument, it is inappropriate formally to rule on it.”

There may be issues in relation to estoppel, however it is not certain it can be relied on. However in the case of an agreement to extend time it may be implicit that the parties have agreed to waive the strict legal requirement that an order be made by the court.

LOOKING AT PRE-CPR HISTORY: HEER –v- TUTTON

A similar problem arose under the old county court rules. The previous CCR Ord 9.r.10 provided that if no defence was filed within 12 months then the action was struck out. Some parties agreed to extend the time beyond the 12 months period. The defendant then argued that, despite the agreement the action stood struck out. There was no provision for extension or reinstatement. This argument was rejected by the Court of Appeal in Heer –v- Tutton [1995] 4 All ER 547 Sir Thomas Bingham MR stated:

“Whether that construction be correct or not, a further question arises whether the closing words of Ord 9, r 10 preclude or invalidate a prospective agreement between the parties that the steps specified in the rule need not be taken but that the action shall not be struck out. It is true, as the defendants point out, that Ord 13, r 4 applies to extension by consent as well as by court order, that the reference to Ord 13, r 4 in Ord 9, r 10 is unspecific, and that it is commonplace for practitioners to speak of parties ‘granting’ extensions to each other. So there is, on a very literal interpretation, no flaw in this part of the defendants’ submission. But we none the less find it unacceptable. It is more natural to speak of the court granting an extension. The lack of specificity in the reference leaves a doubt whether it was intended to apply to agreements reached between the parties before expiry of the 12-month period. This doubt must be resolved in favour of the plaintiffs when one contemplates the unconscionable behaviour which would otherwise be open to, and perhaps even incumbent upon, defendants.

It was pointed out that the parties in these cases did not in terms agree that the action should not be struck out after 12 months under Ord 9, r 10. Some at least of those involved were probably unfamiliar with the rule, and no reference was made to it. This is all true, but unpersuasive. When a plaintiff agrees to extend a defendant’s time for serving a defence, whether indefinitely or indefinitely subject to notice, or for a definite period, he is in effect agreeing not to enter judgment in default of defence during whatever period is agreed. Such agreement necessarily imports an undertaking on the part of the defendant not to exploit to the prejudice of the plaintiff any rule which might otherwise penalise the plaintiff for not entering judgment.”

CONSTRUCTION OF THE CIVIL PROCEDURE RULES

There are many cases and strictures concerning not taking rules pre CPR cases into construction of the CPR. However one central element of Sir Thomas Bingham’s judgment is clear.

“This doubt must be resolved in favour of the plaintiffs when one contemplates the unconscionable behaviour which would otherwise be open to, and perhaps even incumbent upon, defendants.”

It is arguable that this is a general principle of law and construction. Any doubt as to whether the parties can extend time, prospectively, should be resolved in favour of the claimant.

As matters stand it is open to, and indeed arguably incumbent, upon parties to take these points.

WHERE DO WE STAND NOW?

Difficult judgments have to be made in relation to what steps parties should take now.

There could be an unequivocal written agreement that, given the earlier agreements, the parties will not take the point (however this would not step the court taking the point of its own motion).

An application to court “by consent” may not suffice (it did not suffice in Lloyd).

More court time may have to be taken dealing with extensions that were granted months, even years ago.

At present it is simply not possible to point to a definitive; quick or simple answer. A disappointing conclusion I know but it would be pointless to pretend that there are definitive answers to these issues.